Correlation Between G8 Education and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both G8 Education and COAST ENTERTAINMENT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining G8 Education and COAST ENTERTAINMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 Education and COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on G8 Education and COAST ENTERTAINMENT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in G8 Education with a short position of COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 Education and COAST ENTERTAINMENT.
Diversification Opportunities for G8 Education and COAST ENTERTAINMENT
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GEM and COAST is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding G8 Education and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT and G8 Education is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on G8 Education are associated (or correlated) with COAST ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COAST ENTERTAINMENT has no effect on the direction of G8 Education i.e., G8 Education and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between G8 Education and COAST ENTERTAINMENT
Assuming the 90 days trading horizon G8 Education is expected to generate 1.07 times more return on investment than COAST ENTERTAINMENT. However, G8 Education is 1.07 times more volatile than COAST ENTERTAINMENT HOLDINGS. It trades about 0.05 of its potential returns per unit of risk. COAST ENTERTAINMENT HOLDINGS is currently generating about -0.06 per unit of risk. If you would invest 132.00 in G8 Education on August 30, 2024 and sell it today you would earn a total of 2.00 from holding G8 Education or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
G8 Education vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| G8 Education |
| COAST ENTERTAINMENT |
G8 Education and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G8 Education and COAST ENTERTAINMENT
The main advantage of trading using opposite G8 Education and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 Education position performs unexpectedly, COAST ENTERTAINMENT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in COAST ENTERTAINMENT will offset losses from the drop in COAST ENTERTAINMENT's long position.| G8 Education vs. Prodigy Gold NL | G8 Education vs. Enegex NL | G8 Education vs. Invex Therapeutics | G8 Education vs. Pointsbet Holdings |
| COAST ENTERTAINMENT vs. ABACUS STORAGE KING | COAST ENTERTAINMENT vs. Stelar Metals | COAST ENTERTAINMENT vs. Centuria Industrial Reit | COAST ENTERTAINMENT vs. Thorney Technologies |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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